Prices rise for small firms in Columbus on selling block, BizBuySell report finds

It took significantly more cash to buy small companies in Columbus during the first quarter than it did a year earlier, says a new report from BizBuySell.com.

The median asking price for businesses on the selling block in Central Ohio during the first three months of the year was $282,900, a 49 percent increase from $190,000 in 2012, the online marketplace for buying and selling businesses said, citing listings for 121 local companies during the quarter.

Along with the dramatic price increase, fundamentals improved for those businesses on the market.

The median cash flow of listed companies jumped 29 percent to $112,000, from $86,752 a year earlier. Owners asked for a revenue multiple of 0.63, up from 0.58, and a cash flow multiple of 3.1, up from 2.95.

National data from California-based BizBuySell reflected the same trend during the quarter.

The asking price for small businesses nationwide was $199,000, up nearly 11 percent from $179,928 a year earlier. The median closing price shot up 20 percent to $180,000 – a level not seen since the fourth quarter of 2009, according to the report.

BizBuySell gauges closed transactions at the national level, but uses only listings for its local report because of the smaller sample size.

Business financials also improved at the national level, with median cash flow up 21 percent to $100,000.

“Small-business financial indicators have been on the rise for some time now and with many of the metrics reaching levels not seen since the 2008-09 downturn, there is little doubt the improved health is helping push the jump in small-business exit transactions,” Curtis Kroeker, general manager at BizBuySell, said in a press release.

The report indicates the rest of 2013 will be a telling year for small businesses, with some tax and national debt issues behind them.

“We expect small-business health to continue to improve,” Kroeker said. “However, time will tell if it will result in high transaction volumes for the rest of the year or if the market will return to the slow, but steady road to recovery we saw in 2012.”